Through the creation of a livelihood asset index, this study investigates the degree of livelihood vulnerability among indigenous farming households in the rural parish of Guangaje, Ecuador. The use of an asset index enables the estimation and description of the different areas of vulnerability in three communities across livelihood asset types. A unique feature of this article is that it provides a case study of how asset indexes can be used as part of a formative assessment, prior to intervention design, to understand local context. We find low levels of livelihood assets in Guangaje, especially in the categories of human, physical, and financial capital. There is significant variability among the communities linked to differences in access to clean reliable sources of water, the presence of governmental and non-governmental organizations (NGOs), access to credit, and amount of productive capital. The community with the highest composite asset score also had the highest level of social capital, suggesting an important role for social capital in asset creation. Improving social and financial capital, especially access to credit, and increasing human capital through improved educational attainment could be effective approaches for decreasing vulnerability and improving livelihood outcomes in the three study communities and similar indigenous subsistence farming communities across the world.